To Be A lion or A Tiger? Cisco is Facing Big Challenge

Cisco has been facing challenges from competitors like Huawei, Juniper, Hewlett-Packard Co. Competitor is taking actions to narrow its gap with Cisco, for example, Huawei, Technologies Co., China’s largest telephone-network equipment maker, is banking on the rising mergers of computer and communication networks in data routers and switches to share a bigger market with Cisco. Because in this domain, CSICO is clearly the leader, the king in data routers and switches, just like the tiger is the king of the forest. And also in switching, to compete with other rivals such as Hewlett-Packard Co., CISCO is unveiling the new technology on the Catalyst 6500(one of the most popular switching systems has generated $42 billion in revenue since 1999.). It means that many customers will be able to plug new hardware modules into chassis they already own instead of buying an entire new system.

It is said that Cisco is planning to cut as many as 10,000 Jobs to Buoy Profit. John Chambers, the Cisco Chief Executive Officer, is slashing jobs and exiting less-profitable businesses as competitors such as Juniper Networks Inc. and Hewlett-Packard Co. take market share in Cisco’s main businesses with lower-priced, simpler products. Sales of Cisco’s switches and routers, which made up more than half of revenue last year, will continue to slip, said Brian Marshall, an analyst at Gleacher & Co.

Eliminating jobs will help Cisco wring $1 billion in expenses in fiscal 2012, the company said in May. Cisco expects costs of $500 million to $1.1 billion in the fiscal fourth quarter as a result of the voluntary early retirement program, it said in a quarterly filing.

In global router sales, Cisco also lost 6.4 percentage points to 54.2 percent of the market, while Juniper gained, Dell’Oro said. On the road to recovery, CSICO has took possible actions, such as shutting the Flip video-camera unit and cutting 550 jobs, eliminating jobs up to 10000, upgrading its switching systems and routers, providing better networking solutions for different kinds of enterprises and businesses, etc.. Investors of Cisco have said that the company should exit consumer products entirely to focus on traditional enterprise offerings such as routers and switches. Cisco’s equipment is used by corporate networks and telephone and Internet service providers to direct Web traffic.

Cisco is reorganizing management to streamline its business and focus on areas of growth, including core routing and switching; collaboration; cloud computing; network architectures.

For Cisco, to be a tiger may be much better. Because tiger, just a king of a forest, can be a leader in a comparable and professional domain. Although lion is the king of beasts, it is not strong enough to control everything. So focusing on Cisco’s core is a smart decision on its road to recovery.